The Retail Super Bowl is upon us: Black Friday through Cyber Monday is here.

And 2025 is expected to be record-breaking: The National Retail Federation anticipates that, for the first time, U.S. holiday spending will cross $1 trillion. Now, a seeming contradiction—funding for e-commerce startups is at a low.

In 2021, global e-commerce-related startup funding peaked (along with so much else) and reached more than $94 billion, according to Crunchbase. Fast-forward to 2025. That number has come crashing down, lingering around $7.3 billion. (For context, in 2020, e-commerce-related startup funding came in around $31 billion.)

So, what’s going on here? I spoke to Indy Gupta, general partner at VMG Partners, as we headed into Thanksgiving. First thing you need to understand, said Gupta, is th

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